The Defend Trade Secrets Act-Ex Parte Seizure Orders, Really?

It still is not clear to me as to whether or not, the Defend Trade Secrets Act is needed in light of the Uniform Trade Secrets Act adopted by most United States. The expansion of the Economic Espionage Act and ex parte seizure orders of so called “Trade Secrets” that go beyond traditional remedies for trade secrets misappropriation raises red flags to many industry experts or legal professors. The ex parte seizure orders permit a Trade Secret owner to utilize the government’s assistance to seize potential electronic assets that include misappropriated trade secrets without notice to the defendant.

Obviously, such drastic seizure orders without giving the Defendant a due process right to contest the issue raise some serious concerns about anti-competitive use of the Defend Trade Secrets Act. This drastic remedy is hard to justify, but commonly available in litigation involving the Economic Espionage Act. Some of the efforts by the Judiciary Committee to limit the use of this type of ex parte seizure orders to instances, where extraordinary circumstances exist will help prevent abuses of the Defend Trade Secrets Act. However, having a means of enabling Defendant’s to have notice and contest allegations of misappropriation of trade secrets pre-seizure of a Defendant’s assets would curtail much of the potential for abuse and the anti-competitive effects of the Defend Trade Secrets Act as drafted.

It is not clear, what the final version of the combined bill from the Senate and the House of Representatives will contain to address and balance the protection of trade secrets and the potential for abuse of ex parte seizure orders from the government. However, ensuring that ex parte seizure orders are of a very limited nature and a very short duration to prevent the shutdown of a Defendant’s business operations from a seizure of its assets are vital to our economy. Injunctive remedies provided after a notice and an opportunity to contest the claim of trade secret misappropriation seem to be a much better solution than ex parte injunctive remedies. Unless, vital national security interests are involved there really does not even need to be a balancing of any countervailing interest in a private trade secret misappropriation dispute between private citizens.

Thus, further restricting the use of the Economic Espionage Act to bolster a trade secret misappropriation case would prevent these concerns over an anti-competitive use of the ex parte seizure orders. If there is a violation of the Economic Espionage Act, then the private citizen already has the ability to use ex parte seizure orders without having to establish a separate trade secret misappropriation case. In instances of trade secret misappropriation by a foreign government, there is always the ability of the private trade secret owner to sue in a foreign court, sue in US courts over any domestic collaborators or domestic asset owner whose assets are utilized to commit the misappropriation, or seek aid from the US government, if, a national security interest is involved.